CLEP Practice Questions

Question 1

Regional K-Mart stores are selling a specific shirt for $9.99. This method was selected because store managers believe that customers react better to these types of prices. This type of pricing may be categorized as:

Answer 1

Odd-Even Pricing

When using odd-even pricing, the marketer sets prices that end in certain numbers. These numbers are either odd or even based on what the consumer thinks they should be.

Question 2

Which of the following is not a marketing objective?

	product objectives
	price objectives
	channels of distribution objectives
	promotion objectives
	technical design objectives

Answer 2

Technical Design Objectives

Technical design objectives are not part of the marketers objectives. The marketing manager must help decide which products best suit the company’s missions, determine which channels of distribution are the best fit for the company, what type of promotions the company will engage in, and what price the company will place on the product.

Question 3

Which act deals with deceptive advertising, selling practices, and deceptive pricing?

Answer 3

The Federal Trade Commission Act deals with unfair methods of competition.

Question 4

The use of a name, term, symbol, design, or a combination thereof that may or may not be registered is called:

Answer 4

A Brand

Individual ranging is used to separate brands. It helps the consumer avoid confusion of the products offered for sale by a company for business.

Question 5

Packaging includes:

	protection
	product identification
	containment
	promotion
	All of the above

Answer 5

All Of Them

Question 6

Which of the following are products used to produce other products?

	Specialty goods
	Convenience products
	Emergency goods
	Industrial products
	Consumer products

Answer 6

Industrial products are bought and sold with the purpose of building or manufacturing other products to be sold. Specialty products are goods that the consumer will use and will spend time and effort to purchase. Convenience products are consumer products and are purchased without much time and effort. Emergency goods are consumer products that are needed immediately. Consumer products are purchased by the final consumer and are not used to manufacture other products.

Question 7

When a consumer experiences cognitive dissonance, they:

1. may seek additional information to confirm their decision.
2. may be experiencing uncertainty about their purchase decision.
3. may purchase another product next time.
4. may have doubts that lead to tension.
5. All of the above.

Answer 7

All Of Them

Question 8

Transportation provides which of the following utilities?

	possession utility
	place utility
	time utility
	1 and 2
	None of the above

Answer 8

Possession and Place Utilities

Transportation adds value to a marketing strategy, but also contains a cost.

Question 9

Which of the following is not a step in the five-step marketing research process?

	Problem definition
	Interpreting the data
	Solving the problem
	Analyzing the solution
	Writing the proposal

Answer 9

Writing the proposal & Interpreting the data

Explanation of Answer:
The five-step process includes the steps that should be undertaken to complete the research and solve the problem. It is not part of the process in and of itself.

Question 10

A majority of small companies

may use outside research specialists
depend on sales people or managers to conduct the research they do
usually do not have separate marketing departments
can afford a reliable and dependable marketing information system

Answer 10

All Of These

Question 11

Which of the following is not part of the marketing mix?

	promotion
	price
	planning
	product
	channels of distribution

Answer 11

Planning

Explanation of Answer:
Planning is a necessary function of marketing, but it is not part of the marketing mix. To build a successful marketing strategy a marketer depends on the effective combination of using the elements that make up the marketing mix.

Question 12

Reciprocity means

you buy my product and I'll buy yours
I'll buy from you no matter what
either buy from me or I'll ruin your product's name
buy from me and I'll give you a discount
None of the above

Answer 12

you buy my product and I’ll buy yours

Explanation of Answer:
Reciprocity means “If you scratch my back, then I’ll scratch yours.”

Question 13

When designing a research study, the researcher must make sure that the study actually measures what it is supposed to. This is known as:

Answer 13

Validity

Validity means that the study actually measures what it is supposed to measure.

Question 14

Which of the following is the worst choice when transporting a product such as stones?

	truck
	rail
	air
	water
	All of the above are poor choices

Answer 14

Air

Air is an expensive and inefficient transportation method when shipping the products such as rocks or stones.

Question 15

Failure of a new product is usually caused by all the following except:

	poor timing
	bad execution of the marketing mix
	existence of "protocol"
	too small of a target market
	poor promotion and display

Answer 15

Existence of “Protocol”

Protocol refers to the customers need for the product. If the need exists, then the product is more likely to succeed rather then fail.

Question 16

John wants to figure out the mark down of a desk he is selling for $100.00 with a marked down dollar amount of $31.00. What percentage would he come up with?

	3.7%
	15%
	17%
	28%
	31%

Answer 16

31%

Explanation of Answer:
The amount of the markdown is divided by the new selling price, therefore it should be calculated as 31/100 which returns 31%.

Question 17

What is the cost at retail of a product that sells for $400.00 and has a markdown percent of 40%?

	$120.00
	$180.00
	$240.00
	$300.00
	$360.00

Answer 17

$240

Explanation of Answer:
Because Retail Selling Price = Cost - (Cost * Markdown Percent)

or even easier

Retail Selling Price = Cost * (1 - Markdown Percent)

Therefore, Price = 400 * (1 - .4) or 400 * .6 yielding $240.00.

Question 18

Wal-Mart’s buying office just purchased leather belts for $30.00 each. They want a 20% markup at retail on the belts. What retail price should they charge?

	$35.00
	$36.50
	$37.50
	$39.00
	The price cannot be determined.

Answer 18

$37.50

Explanation of Answer:
To calculate the Retail Sales Price, you must divide $30.00(Cost) by 100% - 20%(Markup) returning $37.50.

Question 19

What is the markup percent based on cost, when the cost is $1,000.00 and the markup is $500.00?

	25%
	50%
	75%
	100%
	33.3%

Answer 19

50%

Explanation of Answer:
To find the markup percent on cost, you must divide the amount of markup by the cost. The formula in this situation would be $500/$1,000.00 = 50%.

Question 20

Suzanne wants to start giving tennis lessons to children, and needs to determine the cost in selling price she should charge for lessons. Her friend told her that the markup percent on cost should be 15% and that the amount of markup should be $17.00. What is her cost in selling price?

	cost = $100.00; selling price = $25.00
	cost = $100.00; selling price = $48.55
	cost = $13.00; selling price = $38.00
	cost = $113.33; selling price = $130.33
	cost = $113.33; selling price = $166.66

Answer 20

cost = $113.33; selling price = $130.33

Explanation of Answer:
First we will need to calculate the cost. The formula needed to calculate this is: Markup Percent on Cost * Cost = Amount of Markup. When we plug the numbers in, we have: .15 * Cost = $17. This gives us $113.33. Now we can calculate the selling price by setting it equal to Selling Price = Cost + Markup, which gives us: Selling Price = $113.33 + .15($113.33) or $130.33.

Question 21

Craftsman tools sold by Sears is an example of:

Answer 21

a family brand

A product is known as a family brand when the manufacturer also owns the sales force.

Question 22

Toilet paper is an example of which of the following types of products?

	impulse
	heterogeneous
	staple
	emergency
	specialty

Answer 22

Staple

A staple product is in product which has purchased on a regular basis.

Question 23

A wholesaler that carries a wide variety of non-perishable items such as furniture, hardware, electronics, etc. is called a

	rack jobber
	specialty wholesaler
	single-line wholesaler
	limited-function wholesaler
	general merchandise wholesaler
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Answer 23

General Wholesaler

General merchandise wholesalers were developed to serve retailers that carry a wide variety of non-perishable items.

Question 24

Price fixing falls under which act?

	Lanham Act
	Sherman Act
	Robinson-Patman Act
	Unfair Trade Practice Act
	Magnuson-Moss Act

Answer 24

Sherman Act

The Sherman Anti-Trust Act covers price fixing.

Question 25

What functions or activities do wholesalers provide?

	store inventory
	supply capital
	reduced credit risk
	provide market information
	All Of The Above

Answer 25

All of the above

Explanation of Answer:
Wholesalers store inventory reducing a producers inventory levels, supply capital to reduce the producers need for working capital, reduce credit risk by selling to customers the wholesaler knows, and provides market information as a buyer and seller.

Question 26

During the introduction phase of the product life cycle, the primary goal is informing customers about the product. This promotion is intended to build the demand. This type of demand is known as:

	tertiary demand
	secondary demand
	final demand
	primary demand
	selective demand

Answer 26

Primary Demand

When building primary demand, the goal is to build demand for a product rather than a name brand.

Question 27

Which of the following are more likely to be early adopters?

	Those who are distrusted by their peers.
	Those who tend to be old.
	Those who are often opinion leaders.
	Those who are conservative.
	Those who are the majority.

Answer 27

Opinion Leaders

Explanation of Answer:
Opinion leaders usually tend to be early adopters. Distrusted by their peers is also correct by not is correct as Opinion Leaders.

Question 28

A reference group is important because it may influence one’s purchase because

they're part of middle-class America.
having a Rolls Royce is considered a status symbol.
an opinion leader is a person who influences others in the group.
people make comparisons between themselves and others, and trying to imitate others purchasing decisions.
they are members of the same social class.

Answer 28

people make comparisons between themselves and others, and trying to imitate others purchasing decisions.

People tend to compare themselves to others in their peer group. Because of this they will imitate others buying decisions.

Question 29

Railroads are successful because they can handle large quantities. This allows them to transport goods at what price?

Answer 29

The railroads are successful in transferring goods at cost of $0.03 to $0.04 per ton because they deal in large quantities.

Question 30

Income that is left after taxes that one can make payments on necessities is called:

Answer 30

Disposable Income

Disposable income is income left after paying taxes. This can be used to make necessary expenditures such as housing and car payments.

Question 31

A measure of output of the whole economy and the total market value of goods and services produced in a year in the United States is called:

Answer 31

gross domestic product

The gross domestic product is a measure of output of the entire economy and the total market value of goods and services for the United States.

Question 32

Buying specialists are called:

Answer 32

Purchasing agents are people that specialize in buying.

Question 33

When gathering research one must interpret the results. Of the following which requires the most care in interpreting the results?

	mail surveys
	telephone surveys
	personal interview surveys
	random sampling
	all of the above

Answer 33

All of the Above

All types of research require great care in interpreting the results.

Question 34

Which of the following is the best medium for a marketer that needs to target specific individuals?
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	radio
	direct mail
	television
	billboards
	newspaper

Answer 34

Direct mail allows the marketer to target specific individuals by sending information directly to the potential customer.

Question 35

Which of the following is the best medium to demonstrate a product to a large audience?
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	radio
	direct mail
	television
	newspaper
	magazine

Answer 35

Television allows the marketer to demonstrate a product to many individuals at a given time.

Question 36

Advertising belongs to which part of the marketing mix?
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	product
	price
	place
	promotion
	perception

Answer 36

Promotion is the idea of communication between the buyer and the seller with the hopes of influencing the buyer’s attitudes and behaviors. This is also known as advertising.

Question 37

What is the selling price on cost of an item that costs $10.00 and has a markup percent on cost of 40%?

Answer 37

$14.00

Selling price = cost + markup in the formula used. This gives a selling price of $10.00 * .4 resulting in $14.00.